United States District Court, N.D. California
ORDER VACATING HEARING AND GRANTING MOTION TO REMAND
RE: DKT. NO. 17
C. SPERO JUDGE.
Ali Rankankan brought this action in the California Superior
Court for Contra Costa County alleging several claims arising
from the foreclosure of certain property in San Ramon,
California. Defendant JPMorgan Chase Bank, N.A.
("Chase") removed to this Court, asserting
diversity jurisdiction on the basis that Defendant MTC
Financial Inc. d/b/a Trustee Corps ("MTC"), a
California corporation, was fraudulently joined. Rankankan
now moves for a preliminary injunction and to remand to state
court, and Chase and MTC each move to dismiss. The Court
finds the Motion to Remand suitable for resolution without
oral argument and VACATES the hearing previously set for June
24, 2016. For the reasons discussed below, Rankankan's
Motion to Remand is GRANTED. This Court lacks jurisdiction
over the case in its present form and thus does not reach the
Allegations of the Complaint
allegations are generally taken as true at the pleading
stage, and are therefore recited here as fact. Nothing in
this Order should be construed as resolving any issue of fact
that might be disputed at a later stage of the case.
times relevant, Rankankan resided in Contra Costa County,
California, and owned property at 9640 Acosta Boulevard in
San Ramon (the "Property"). Compl. ¶ 1. Around
February of 2005, Rankankan obtained a home equity line of
credit (the "First HELOC") from Washington Mutual
Bank ("WaMu")-a predecessor to Defendant Chase-in
exchange for executing a promissory note secured by a deed of
trust (the "WaMu Deed of Trust") on the Property.
Id. ¶ 9. The WaMu Deed of Trust provided that
the trustee would "reconvey the Property to the person
entitled thereto, on written request of [WaMu], or following
satisfaction of the obligation secured" by the deed.
Id. ¶ 10.
year later, in February of 2006, Rankankan refinanced his
loan through non-party GreenPoint Mortgage Funding, Inc.
("GreenPoint"), which paid the full balance to
WaMu. Id. ¶ 12. Rankankan also completed
various administrative steps as instructed by WaMu to close
the First HELOC and ensure that GreenPoint would have the
first priority lean on the Property, which was a requirement
of the refinance. Id. ¶¶ 12-14. Rankankan
and GreenPoint believed that WaMu had closed the First HELOC
and had recorded a reconveyance. Id. ¶¶
13-14. GreenPoint subsequently recorded its own deed of trust
(the "GreenPoint Deed of Trust") to secure the
refinance, which it later assigned to U.S. Bank, N.A.
Id. ¶¶ 15-16.
March of 2006, WaMu provided a second home equity line of
credit (the "Second HELOC") to Rankankan, but did
not inform Rankankan or GreenPoint that it had neither closed
the First HELOC nor recorded a reconveyance. Id.
¶ 21. When Rankankan exceeded the credit limit of the
Second HELOC, WaMu extended credit on the First HELOC without
informing Rankankan that it was doing so. Id. ¶
22. According to Rankankan, since the First HELOC should have
been closed, any debt that he incurred to WaMu beyond the
limit of the Second HELOC should have been unsecured. See
September of 2011, Chase, as successor to WaMu, recorded a
notice of default based on a first position lien on the
Property. Id. ¶ 17. U.S. Bank, believing that
it was entitled to the first position lien, sued Chase and
Rankankan for WaMu's failure to record a reconveyance
after WaMu was paid in full on the First HELOC. Id.
¶ 18. In April of 2012, U.S. Bank dismissed Rankankan
from that action and filed notice that it had reached a
conditional settlement with Chase. Id. ¶ 19.
Chase then recorded a subordination of the WaMu Deed of Trust
pursuant to a confidential settlement agreement with U.S.
Bank, giving priority to the GreenPoint Deed of Trust.
Id. ¶ 20. Rankankan did not consent to or know
the terms of the settlement. See Id. Rankankan
alleges that after Chase recorded the subordination,
"TITLE CORP informed RANKANKAN that the foreclosure
would not go forward, " and Rankankan relied on that
representation. Id. ¶ 47. In context and based
on Rankankan's present arguments, "TITLE CORP"
apparently refers to Defendant MTC.
recorded an assignment in 2014 formally assigning the
beneficial interest under the WaMu Deed of Trust to Chase.
Id. ¶ 23. In July of 2015, Chase recorded a
substitution of trustee designating MTC as the trustee under
the WaMu Deed of Trust. Id. ¶ 24.
February 16, 2016, Chase and MTC recorded a notice of
trustee's sale based on the WaMu Deed of Trust.
Id. ¶ 25. Rankankan provided Chase with
evidence that the First HELOC was paid in full in 2006 and
should have been closed, but Chase has refused to rescind
either the notice of default or the notice of sale.
Id. ¶ 26.
Complaint includes eleven claims: (1) fraud; (2) breach of
contract; (3) wrongful foreclosure; (4) "failure to
record reconveyance"; (5) slander of title; (6) quiet
title; (7) negligent misrepresentation; (8) unfair business
practices; (9) intentional infliction of emotional distress;
(10) negligent infliction of emotional distress; and (11)
declaratory relief. Id. ¶¶ 27-104. Chase
is named as a defendant to all claims; "Title Corp"
is named as a defendant to all claims except those for fraud,
breach of contract, failure to record, and unfair business
practices; and U.S. Bank and all other persons claiming an
interest in the property are named as defendants to the
claims to quiet title and for declaratory relief. See
Id. The term "Title Corp" is not defined in
the Complaint, but based on Rankankan's arguments, and
because MTC is the only defendant besides Chase and U.S. Bank
named in the Complaint, the Court ...